Traders’ Diary: Remain cautiously optimistic on the market

Headline indices gave a cool reception to the RBI's decision of keeping key benchmark rates, including the repo rate, on hold. They settled lower, but did not make the kind of noise as yesterday when they moved with wild gyrations.

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08:07 PM

Albeit things are looking bleak, the trend is slowly turning positive, as almost three stocks advanced for every single stock that declined for the day. Besides, two momentum oscillators generated a buy signal, which shall instil more confidence among the bulls if the next trading session closes in the positive terrain. Time is ripe for a pullback move towards the 10,730 level

- Mazhar Mohammad, Chartviewindia.in

07:59 PM

It is heartening to note that the apex bank has acknowledged a positive outlook of growth due to a combination of factors such as investment, export recovery, asset resolution for large borrowers and increase in credit off take. The removal of the priority sector cap for MSME loans will help to channel additional resources to this sector. The flexibility given to non-residents to hedge currency and interest rates is a positive move that will deepen the Indian markets

The market was slightly circumspect in light of fiscal slippage and was expecting a stern stance. In contrast, the RBI came with status quo accompanied by a milder stance. This came as a sigh of relief for an excessively bearish market. We believe that the central banker’s policy stance would be increasingly data driven and were the crude prices to behave favourably, we may be in for a long pause

- Lakshmi Iyer, CIO (Debt) & Head – Products, Kotak Mutual Fund

06:48 PM

If it manages to do so, we may see a bounceback towards 10,600-10,650 levels. Failing to breach, the index may slip towards 10,285

- Vaishali Parekh, Senior Technical Analyst at Prabhudas Lilladher

06:35 PM

MARKET TODAY

Nifty formed a Bearish Belt Hold pattern. Now, as long as it holds below 10,650, weakness could continue to take it towards 10,400 and 10,350, while on the upside, hurdles are seen at 10,700 and 10,750 levels

The RBI has maintained status quo on expected lines citing various reasons which can lift inflation in the coming days. In the near term, domestic markets could remain volatile, mimicking global market performance, mainly the US. Also, the last leg of the Q3FY18 results would drive stock specific movement and volatility. We remain cautiously optimistic on the markets and advise investors to invest in fundamentally strong companies after the much required correction

- Jayant Manglik, President, Religare Broking

05:09 PM

Banks underperformed the overall market. The RBI policy which came out at 2.30 pm had hawkish undertones, which spooked the markets at the closing session. Cement stocks were the worst performers for the session, whereas oil marketing companies held up in trade today. We maintain that the markets are overvalued at the current juncture and would not recommend entering fresh longs at this point

- Nikhil Kamath, Co-Founder and Head of Trading, Zerodha

04:36 PM

The RBI monetary policy announcement is pragmatic and balanced. The RBI inflation outlook suggests moderation in second half of FY2019 that will have a positive impact on bond market. Apart from the status-quo in rates that was widely anticipated, the forbearance allowed to MSME borrowers, broadening the definition of priority sector lending and simplification of repo directions among others are all positive steps towards a stable macro environment

- Rajnish Kumar, Chairman, SBI

04:30 PM

Monetary policy status quo is a reflection of RBI’s caution amidst recent global developments of higher crude oil prices and financial market gyrations. While RBI’s policy stance could remain unchanged in the near future, fiscal policy has taken the onus on curbing inflationary pressures via proactive management of the food economy and some rationalization in fuel taxes, if need be

- Rana Kapoor, MD & CEO, YES Bank

04:29 PM

RBI was understandably cautious in its outlook with the pressures building on inflation from oil prices, potential MSP increases and fiscal slippage. The RBI also very clearly articulated the reasons it feels why bond yields are trading where they are and virtually sent a signal to the government to desist from making public demands from them for OMOs to manage the rising government bond yields

Markets were expecting no change in the policy stance and will be considered non event, in the commentary RBI said, they wants to protect the early signs of recovery and keep economy conducive for the growth. This is a positive stance and goes well with broad market sentiments. We think these dips should be used to further build the position in the equity as the "earnings revival" is around the corner

- Motilal Oswal, Chairman & MD, MOFSL

03:47 PM

CLOSING BELL

Bond market shrugged off some of its early worries after the Reserve Bank of India kept the policy rate unchanged without tightening its policy stance from ‘neutral’ now. The benchmark bond yield dipped eight basis points to 7.52% pushing prices up in the afternoon trade. The currency market remained steady with no wild swings. At 15:00 hrs the rupee gained a tad to trade at 64.17 a dollar versus 64.25 closed on Tuesday.

While India's budget is set to stoke demand, worsening public finances may crowd out private funding and investment, the central bank said in a statement. "The committee is of the view that the nascent recovery needs to be carefully nurtured and growth put on a sustainably higher path through conducive and stable macro-financial management."

Most of the metal and mining stocks including Jindal Stainless (Hisar) (up 4.63 per cent), APL Apollo Tubes (up 3.71 per cent) and Hindalco Industries (up 3.01 per cent) were trading up in afternoon trade on Wednesday.

Japanese stocks pared early gains to end a notch higher in volatile trade on Wednesday as investors stayed on guard for more losses in global equity markets after US futures slipped. The Nikkei 225 share average ended 0.2 per cent lower at 21,645.37, after climbing as high as 22,353.87 in early trade.

01:01 PM

JUST IN

Rising bond yields and projection of possible spike in inflation are key concerns for policymakers globally and RBI policy review could revolve around them. RBI may also take note of the government's revised fiscal targets and may turn hawkish.

12:05 PM

NIFTY BANK EXTENDS SLIDE FOR FIFTH STRAIGHT SESSION

11:56 AM

THESE STOCKS GAINED UP TO 20% IN TRADE TODAY

Price as on 07 Feb, 2018 11:56 AM, Click on company names for their live prices.

KEC InternationalBSE 4.99 % climbed nearly 7 per cent on Wednesday after the company informed bourses that it has secured new orders of Rs 2,035 crore across businesses. The stock ruled higher by 6.94 per cent as it hit Rs 372 on the BSE.

Bajaj Electricals climbed nearly 8 per cent on Wednesday after the company informed stock exchanges that its engineering and project business unit bagged a power distribution job contract worth of $4.12 million. Shares of the consumer product, luminaires and EPC company went up 7.92 per cent to hit a high of Rs 482.20 on the BSE.

Hero MotoCorp jumped over 7 per cent on Wednesday after the automaker signalled a double-digit growth for scooters and motorcycles in 2018-19. The two-wheeler maker also announced an interim dividend of Rs 55 following its third quarter results.

10:28 AM

CHECK OUT THE TOP MOVERS OF THE TRADE

Price as on 07 Feb, 2018 10:28 AM, Click on company names for their live prices.

RUPEE SURGES 20 PAISE AGAINST DOLLAR IN EARLY TRADE

The rupee strengthened by 20 paise to 64.04 against the dollar at the interbank forex market today on fresh selling of the American currency by exporters and banks ahead of the announcement of RBI's monetary policy.

09:56 AM

LONG-TERM INVESTMENT, ANYONE?

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HEARD ON DALAL STREET

OPENING BELL

PRE-OPEN SESSION: SENSEX UP 200 PTS, NIFTY TOPS 10,600

Indices gain over 1% each; Sensex up 200 points, Nifty50 at 10,600; Rupee trades at 64.08 against US dollar.

08:53 AM

CUES FROM SINGAPORE

Nifty futures on the Singapore Stock Exchange were trading 143.30 points, or 1.37 per cent, lower at 10,639, indicating a gap-up opening start for the Nifty50 in India. "For most clients, we are advising a wait and watch approach and not to hastily buy or sell," said Anirudha Taparia, Executive Director at IIFL Investment Managers.

08:53 AM

NIFTY NEEDS TO RISE ABOVE 10,650 LEVEL

The index slipped below 50-day moving average of 10,554 on Tuesday. At close, it stood at 10,498, down 168.30 points, or 1.58 per cent. Chandan Taparia of Motilal Oswal Securities said the index has been making lower lows for past seven trading sessions. "Weakness is visible the world over. Till it remains below 10,650, weakness could continue to take it towards 10,400 and 10,350,” he said.

08:53 AM

RBI POLICY OUTCOME TODAY

The two-day policy outcome of RBI's monetary policy committee is due later in the day, wherein the policy makers are expecting to turn a bit hawkish on the policy rate. "We expect the Reserve Bank of India (RBI) to undoubtedly turn more hawkish at its monetary policy meet and lay the ground for a rate hike, possibly at its next meeting. Our base case is a rate hike in 1QFY19 as an inflation- targeting central bank will prefer to act pre-emptively, and raise rates sooner than later," said Nirmal Bang Institutional Equities.

08:53 AM

Q3 EARNINGS TODAY

Cipla, Aurobindo Pharma, BEML, Eicher Motors, Gati, SpiceJet, Torrent Power and VOltas some of the companies which will announce their quarterly earnings on Wednesday.

08:52 AM

LARGECAP CAN BE BETTER INVESTMENT OPTIONS

For retail investors seeking to navigate the choppy waters, largesized companies appear to be better bets now as appetite for risk assets diminishes in India. Besides having relatively cheaper valuations compared to smaller peers, large-sized companies continue to record double-digit growth in earnings and revenues in the December 2017 quarter, given established business models and greater resilience against business cycles.

08:52 AM

US BOND YIELDS NOT A PROBLEM FOR STOCKS

The hardening of US bond yields over the past few days has led to a sharp fall in the markets across the globe. However, empirical data suggests this could be a temporary phenomenon. Data for the last 20-years show a high correlation between 10-year US bond yields, Dow Jones Industrial Average (DJIA) and Sensex over medium and long-term, except for the temporary adjustments due to shift in the flows between asset classes.

08:52 AM

ASIAN MARKETS ON A RECOVERY MODE

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.7 per cent, recouping some of Tuesday's 3.5 per cent fall. That had been its biggest daily drop since August 2015, Reuters reported. Chinese blue chips rallied 1.2 per cent and Japan's Nikkei rebounded 3.1 per cent. The latter had slid 4.73 per cent on Tuesday for its steepest fall in 15 months.

08:52 AM

DOW SEES BIGGEST PERCENTAGE RISE IN 2 YEARS

The Dow Jones Industrial Average had a more than 1,100-point difference between its high and low on Tuesday. The Dow posted a 2.3 per cent increase, its biggest daily percentage gain since January 29, 2016, while the S&P 500 rose 1.7 per cent, its biggest one-day gain since November 7, 2016, the day before the election of Donald Trump as president, Reuters reported.

08:51 AM

SENSEX ON TUESDAY

The S&P BSE Sensex on Tuesday opened over 1,000 points down at 33,753.78 against previous close of 34,757.16. The headline index took further dips to hit an intraday low of 33,482.81, before staging respectable recovery. It finally shut shop at 34,195.94, down 561 points. All the 30 components in the index closed in the red.